Analysis: Obamacare premiums to rise by average of 34 percent in 2018

The price of premiums for Obamacare’s mid-level plans are set to rise by an average of 34 percent next year, according to an analysis by the consulting firm Avalere Health.

These mid-level, or silver, plans are considered to be benchmark plans for people who sign up for Obamacare’s health insurance. Premiums for bronze, gold, and platinum plans will rise by an average of 18 percent, 16 percent, and 24 percent, respectively, compared to last year.

Average premium increases varied by state, the analysis found. Iowa will have the highest jump in average silver premium, of 69 percent, while Alaska will have a decrease in premiums of 22 percent. Alaska’s plan was lower this year because the state set up a reinsurance program in which state and federal funds paid for the medical claims of high-cost enrollees.

Avalere concluded that the increase could be attributed to lower-than-anticipated enrollment in these plans as well as uncertainty about the future of the Obamacare exchanges. Insurers do not know, for instance, whether the Trump administration will enforce the individual mandate that obligates people buy health insurance or pay a tax. President Trump also ended insurer payments known as cost-sharing reduction subsidies, which causes the price of premiums to go up.

People who make more than $48,000 a year for an individual or $94,000 for a family of four, are not eligible for premium subsidies. The Kaiser Family Foundation estimates that population is roughly 6.7 million, and most of them do not buy on state or federal exchanges, but directly through an insurer or a broker. Avalere’s analysis warned that some people in this group may choose not to enroll in these plans at all in 2018, meaning more could become uninsured. About 9 million others would receive subsidies that would cause their plans to remain at the same price they have paid in the past, assuming their gross income remains the same.

“Plans are raising premiums in 2018 to account for market uncertainty and the federal government’s failure to pay for cost-sharing reductions,” Caroline Pearson, senior vice president at Avalere, said in a statement. “These premium increases may allow insurers to remain in the market and enrollees in all regions to have access to coverage.”

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